The USD\/JPY pair is experiencing downward pressure as the US Dollar weakens against the Japanese Yen. As of now, the pair trades near 153.06, close to a two-month low following a sharp reversal last week.<\/p>\n
Although Japan has not confirmed a direct intervention, officials express concern over foreign exchange developments. They are prepared to act against excessive movements. Markets anticipate the Federal Reserve’s upcoming decision on interest rates, with traders focusing on Chairman Jerome Powell’s guidance, as no rate changes are expected. <\/p>\n
A hint of possible rate cuts later this year could apply additional pressure on the US Dollar. Conversely, a cautious or hawkish stance may provide near-term support to USD\/JPY. Technically, the pair’s outlook is bearish, with the price moving below key simple moving averages.<\/p>\n
Momentum indicators show potential further declines. The MACD indicates a strengthening of downside momentum, while the RSI displays weakness by falling to oversold levels. A break below 153.00 may lead to further losses. Alternatively, a rise above 155.00 could alleviate short-term bearishness, though the pair’s trading below the 100-day SMA suggests downward potential persists.<\/p>\n
The bearish momentum we saw build last year has carried through. The slide below the 100-day Simple Moving Average proved to be a critical signal for the downtrend. Now, with the pair trading near 148.50, the market reflects the Federal Reserve’s two rate cuts in late 2025 while the Bank of Japan has cautiously tightened its own policy.<\/p>\n
We should remember the sharp drops caused by suspected Ministry of Finance interventions throughout 2025 when the pair was trading above 155. At current levels, the risk of such direct action has faded, reducing the need for aggressive downside protection. This has lowered USD\/JPY 1-month implied volatility to around 8.5%, making options pricing more reasonable compared to the peaks of over 12% we saw last year.<\/p>\n
The Fed’s dovish pivot was the main driver, but markets have now largely priced in their recent cuts. U.S. inflation data released last week came in at 2.5%, suggesting the Fed may pause, while Japan’s core inflation holds just above 2.0%. This narrowing policy gap suggests the strong downward momentum could slow in the coming weeks.<\/p>\n
Given the subsiding momentum, traders could consider selling out-of-the-money call options or implementing bear call spreads to capitalize on range-bound price action. This strategy profits if USD\/JPY stays below a certain level, aligning with the view that the path of least resistance is still down but the explosive moves are behind us. The psychological 150.00 level, a support we watched in 2025, now acts as a significant resistance point.<\/p>\n
The Relative Strength Index (RSI) is no longer in the deeply oversold territory we saw in late 2025, now hovering around 40 on the daily chart. While the technical outlook remains tilted to the downside, the lack of an extreme reading suggests a consolidation phase may be approaching. A firm break below the recent low of 147.80 would be needed to signal a new leg down.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/JPY nears two-month low as dollar weakens; technical indicators signal bearish momentum and possible further declines.<\/p>\n","protected":false},"author":62,"featured_media":17053,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40275","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40275","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=40275"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40275\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17053"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=40275"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=40275"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=40275"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}